These consumer packaged goods stocks are popular among investors
Summary
- Tyson Foods
TSN
, Kraft Heinz, Kellanova, General Mills
GIS
and Hormel are among the consumer defensive companies gurus like.
With Thanksgiving Day only a few weeks away, investors may be interested in companies that profit from the annual feast that brings family and friends together.
While the American Farm Bureau Federation’s annual survey for 2023 has not yet been released, the average cost of a 12-dish feast for 10 people was $64.05 in 2022 and $53.31 in 2021. Although the overall cost is not yet known, the AFB is expecting a 22% decline in turkey prices this year, falling to $1.27 per pound.
As a result, good value opportunities may be found among consumer defensive stocks that are popular with gurus.
The GuruFocus Aggregated Portfolio, a Premium feature based on 13F filings, found farm products and packaged foods companies that were held by more than 10 gurus as of the end of the second and third quarters included Tyson Foods Inc. (TSN, Financial), The Kraft Heinz Co. (KHC, Financial), Kellanova Co. (K, Financial), General Mills Inc. (GIS, Financial) and Hormel Foods
HRL
Corp. (HRL, Financial).
Tyson Foods
Holding a combined equity portfolio weight of 7.44%, 18 gurus have positions in Tyson Foods (TSN, Financial).
The Springdale, Arkansas-based processor of chicken, beef, pork and even turkey products has a $16.66 billion market cap; its shares were trading around $46.85 on Tuesday with a price-earnings ratio of 50.92, a price-book ratio of 0.89 and a price-sales ratio of 0.31.
The GF Value Line
VALU
suggests the stock is significantly undervalued currently based on its historical ratios, past financial performance and analysts’ future earnings projections.
At 84 out of 100, the GF Score indicates the company has good outperformance potential, driven by high ranks for profitability, growth and value, middling marks for financial strength and a low momentum rating.
Of the gurus invested in Tyson Foods, Yacktman Asset Management (Trades, Portfolio) has the largest stake with 0.86% of its outstanding shares. The T Rowe Price Equity Income Fund (Trades, Portfolio) and Yacktman Fund (Trades, Portfolio) also have significant positions in the stock.
Kraft Heinz
Fourteen gurus have positions in Kraft Heinz (KHC, Financial), representing a combined weight of 8.19%.
Headquartered in Chicago, the owner of the Oscar Mayer, Kraft, Velveeta, Heinz and Jell-O brands has a market cap of $40.57 billion; its shares traded around $33.08 on Tuesdaywith a price-earnings ratio of 13.67, a price-book ratio of 0.82 and a price-sales ratio of 1.51.
According to the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 62 implies the company has poor future performance potential on the back of a high profitability rank, more moderate marks for financial strength and value and low ratings for growth and momentum.
With a 26.51% stake, Warren Buffett (Trades, Portfolio) is the company’s largest guru shareholder. Other top guru investors include First Eagle Investment (Trades, Portfolio), Bill Gates (Trades, Portfolio)’ foundation trust, Jim Simons (Trades, Portfolio)’ Renaissance Technologies and Ray Dalio (Trades, Portfolio)’s Bridgewater Associates.
Kellanova
Kellanova (K, Financial) is held by 13 gurus with a combined equity portfolio weight of 7.79%.
The Chicago-based company, which was created following a split up of cereal producer Kellogg to make snacks like Cheez-It crackers, Pringles chips, Pop-Tarts and Rice Krispies Treats, has a $17.48 billion market cap; its shares were trading around $51.05 on Tuesday with a price-earnings ratio of 20.42, a price-book ratio of 4.41 and a price-sales ratio of 1.11.
Based on the GF Value Line, the stock is modestly undervalued currently.
The GF Score of 67 means the company has poor performance potential. Despite having high profitability and value ranks, the growth and financial strength ratings are more moderate and momentum is low.
Simons’ firm is Kellanova’s largest guru shareholder with a 0.71% stake. Mason Hawkins (Trades, Portfolio), Dalio’s firm, Mario Gabelli (Trades, Portfolio), Ken Fisher (Trades, Portfolio), Mark Hillman (Trades, Portfolio), Joel Greenblatt (Trades, Portfolio), John Hussman (Trades, Portfolio) and several other gurus also own the stock.
General Mills
With a combined equity portfolio weight of 2.60%, 11 gurus are invested in General Mills (GIS, Financial).
The company known for its Pillsbury, Betty Crocker and Cheerios products, which is headquartered in Minneapolis, has a market cap of $37.94 billion; its shares traded around $65.27 on Tuesdaywith a price-earnings ratio of 15.92, a price-book ratio of 3.70 and a price-sales ratio of 1.93.
The GF Value Line suggests the stock is modestly undervalued currently.
With a GF Score of 62, the company is likely to have poor performance going forward. It raked in a high rating for profitability and middling marks for three of the criteria, but did not receive a momentum rank.
Holding 0.61% of General Mills’ outstanding shares, Simons’ Renaissance Technologies has the largest stake among the gurus. Dalio’s Bridgewater, Gabelli, Mairs and Power (Trades, Portfolio), Fisher, Jeremy Grantham (Trades, Portfolio) and Greenblatt, among others, also have positions in the stock.
Hormel Foods
Representing a combined equity portfolio weight of 3.70%, 10 gurus are invested in Hormel Foods (HRL, Financial).
The Austin, Minnesota-based company, whose brands include Jennie-O turkey, has a $17.83 billion market cap; its shares were trading around $32.63 on Tuesday with a price-earnings ratio of 20.26, a price-book ratio of 2.31 and a price-sales ratio of 1.48.
According to the GF Value Line, the stock is significantly undervalued currently.
Hormel is likely to have average performance potential going forward based on its GF Score of 79. It raked in high ratings for three of the categories, middling growth marks and a low momentum rank.
With a 0.96% stake, Mairs and Power (Trades, Portfolio) is Hormel Foods’ largest guru shareholder. Other top guru investors include Simons’ firm, Gates’ foundation trust, Dalio’s firm, Tom Russo (Trades, Portfolio) and Greenblatt.
Other popular picks
Additional farm products and packaged food companies that 13F filings show were broadly held by gurus as of the second and third quarters include Ingredion
INGR
Inc. (INGR, Financial), Archer-Daniels Midland Co. (ADM, Financial), Herbalife
HLF
Ltd. (HLF, Financial), Darling Ingredients Inc. (DAR, Financial) and Cal-Maine Foods
CALM
Inc. (CALM, Financial).
Investors should be aware 13F filings do not give a complete picture of a firm’s holdings as the reports only include its positions in U.S. stocks and American depository receipts, but they can still provide valuable information. Further, the reports only reflect trades and holdings as of the most-recent portfolio filing date, which may or may not be held by the reporting firm today or even when this article was published.
Disclosures
I/we have no positions in any stocks mentioned, and have no plans to buy any new positions in the stocks mentioned within the next 72 hours
Read the full article here